The Banker's Candidate

Financial firms have long liked what Dodd has done in the areas of legislation and regulation. "Chairman Dodd is a thoughtful leader in Congress playing an important policy role to ensure an open, competitive and sound global financial services marketplace," said Robert S. Nichols, president of the Financial Services Forum, a Washington group comprising the chief executives of 21 U.S. financial services companies, in typically flowery praise of the new chairman.

"A lot of his constituents are financial services types, and he's always been a reasonable person on those issues," added Bruce E. Thompson Jr., the head of government relations for Merrill Lynch. "Because of that, he's always gotten support from the industry."

"The financial services community would be a logical source of funding for him," agreed Edward L. Yingling, president of the American Bankers Association.

Dodd is a voice of federal restraint when it comes to financial services. He has opposed vigorous federal regulation of hedge funds, many of which are based in Connecticut. He also was the Senate's leading champion of a 1995 law that limited shareholders' right to bring class-action lawsuits against companies for alleged securities misdeeds.

Now, Dodd is leading the charge to renew terrorism-insurance legislation, which makes the federal government a major co-underwriter of insurance against terrorist attacks.

Hedge funds are "a great wealth generator" that if handled properly "will continue to be a tremendous asset," Dodd said. He added that the Banking Committee would probably not hold hearings on hedge funds this year.

"I don't want to be perceived . . . as setting up roadblocks and barriers to something I perceive to be very valuable," he said.

On the other hand, Dodd has taken some anti-industry positions. He helped write the Sarbanes-Oxley Act, which imposed stiffer penalties on accounting irregularities. He has also taken positions on a few narrow issues that anger financial firms but are popular with the populists who usually vote Democratic.

For instance, Dodd said he intends to campaign against predatory-lending practices by banks, which entail charging excessive interest rates on mortgage loans, often to low-income people. He also said he wants to crack down on excessive fees charged by credit card companies.

Dodd has leveraged his committee's jurisdiction to press for Wall Street jobs for low-income workers. In recent weeks, he has reached out to minority voters with a speech at the Rainbow/Push Coalition's Wall Street Economic Summit in New York. At the summit, convened by the Rev. Jesse L. Jackson, Dodd decried economic inequality and pledged to establish a "working group" to expand opportunities for minorities in the financial services industry.

Since assuming the Banking Committee chairmanship last month, Dodd has held hearings on predatory mortgage loans and high-interest-rate credit cards that burden consumers with unwieldy debt. He is working with Elizabeth Warren, a Harvard Law School professor and consumer bankruptcy expert, and others to roll back those high fees, he said.

"At the end of my tenure on this committee, I want it to be said that the safety and soundness of our financial institutions was not weakened on my watch," Dodd said.

Travis B. Plunkett, legislative director at the Consumer Federation of America, said the group's rating on Dodd has been a "mixed bag." But, Plunkett added, he's effective. "He often ends up on the winning side of an issue."

"We love to have him on our side, and we wince when we're going to be opposing him because he's a very effective legislator," Plunkett said.